LightSquared gets satellite waiver

A bird in the air is worth ignoring

The marginally insane plan for a US-spanning mobile network using frequencies reserved for satellite is looking more likely, thanks to an FCC decision that handsets won't have to be satellite-capable.

Earlier this month the National Telecommunications and Information Administration (NTIA) requested clarification in the rules, which demand that equipment supplied by LightSquared is satellite-capable but are less clear if the same obligation applies to its resellers. Now the FCC has decreed that it doesn't, making LightSquared a satellite operator in name only despite the fact that it has (and is required to have) an operational satellite.

That's important, because if LightSquared is going to make back the $7bn it plans to spend building the national network it's going to have to find new customers for its connectivity. These will come in the shape of companies supplying set-top boxes, washing machines, games consoles and the like, which might not be happy sporting a satellite dish on top.

But the radio frequencies LightSquared is using are supposed to be reserved for satellite communications, which is how the company bought them on the cheap. Competitors were hoping that requiring every device connected to the LightSquared network to be satellite capable would drive up the price, to their advantage, but it seems that won't be happening.

Even if the devices had been satellite-capable, LightSquared wasn't planning on carrying more than 0.0005 per cent of the traffic via its bird, so arguments that removing the requirement will lead to increased interference are facetious at best, though that didn't stop the NTIA making them.

LightSquared will have to undertake some work to ensure that it's not going to interfere with the low-power GPS signals, but that's nothing compared to the problems it faces raising the $7bn it needs to build network on the ground. It's also unlikely the other operators are going to sit back and let this lie when they've spent so much money on radio spectrum on the basis that it isn't encumbered by any satellite requirement.

It's possible to imagine a similar scenario in Europe, but the task would be complicated by the lack of cross-Europe regulatory body - a satellite operator would need to get a similar waiver for every country, and the UK's regulator Ofcom has made it clear it won't be allowing this kind of behaviour.

The FCC reckons greater competition is always a good thing, even if it means bending the rules a little every now and then. LightSquared may provide that competition, and this decision helps, but it's still a long way from connecting anyone up. ®